With wages rising sharply for average Joes in this country, it’s no surprise that pay is climbing for top executives too.
Across the economy, average hourly earnings climbed 5.5% in the 12 months through April.
And total compensation climbed at least 12% last year for most chief executives in a Wall Street Journal analysis of MyLogIQ statistics for more than 400 of the biggest U.S. companies.
The median compensation for these CEOs hit $14.7 million in 2021, a sixth straight record. The pay includes cash and equity.
Expedia (EXPE) Chief Executive Peter Kern topped the list at $296 million. Warner Brothers Discover (DISCA) Chief Executive David Zaslav was second at $247 million, and ServiceNow (NOW) Chief Executive Bill McDermott was third at $166 million. ServiceNow is a workflow-management software company.
Criticism of Executive Pay
Not everyone is pleased with the hefty pay packages for Corporate America’s top dogs.
“Corporate boards running America’s largest public firms are giving top executives outsize compensation packages that have grown much faster than the stock market and the pay of typical workers, college graduates, and even the top 0.1%,” the left-leaning Economic Policy Institute said in a report last August.
“In 2020, the ratio of CEO-to-typical-worker compensation was 351-to-1 under the realized measure of CEO pay; that is up from 307-to-1 in 2019 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989.” Realized pay counts stock awards when vested and stock options when cashed in rather than when granted
The implications aren’t pretty, the report said. “Exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with,” it stated.
“CEOs are getting more because of their power to set pay and because so much of their pay (more than 80%) is stock-related, not because they are increasing their productivity or possess specific, high-demand skills.”
The report had several suggestions to solve the problem, including:
· “Reinstating higher marginal income tax rates at the very top;
· “Setting corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation;
· “Use of antitrust enforcement and regulation to restrain firms’ — and by extension, CEOs’ — excessive market power;
· “Allowing greater use of ‘say on pay,’ which allows a firm’s shareholders to vote on top executives’ compensation.”